In a decision handed down, on Tue 21.4.2015, the NSW Civil and Administrative Tribunal affirmed a decision of the Commissioner of State Revenue (NSW) refusing the taxpayers’ claim for the principal place of residence (PPR) exemption in respect of a property for the 2012 and 2013 land tax years.
The taxpayers (a couple) argued the property located at Longueville (NSW) was their PPR. In 2011, the couple had to move to Melbourne for employment and the property was leased. The couple said they had to regularly visit Sydney to see family including their children and the husband’s father who was ill. It was submitted that they did not move to make a profit but merely to keep in work as an active member of the community. On 1 December 2011, the couple returned to Sydney but were unable to take up residence as the property was leased. They sought to sell the property in mid-2013 however they were unable to do so as the agent had re-leased the property. It was submitted the assessment resulted in an “unfair and unjust” treatment of the taxpayers.
The key issue was whether the ‘absence’ concession contained in clause 8 of Sch 1A to the Land Tax Management Act 1956 (NSW) applied. It was common ground that the property was rented from 30 June 2011 to at least 3 January 2014. The Tribunal held the concession did not apply to the taxpayers in respect of the relevant tax years. It held the taxpayers had not satisfied it on the balance of probability that land tax was not payable by them in respect of the relevant period in accordance with the assessment.
(Bright & Anor v Chief Comr of State Revenue [2015] NSWCATAD 80, NSW Civil and Administrative Tribunal, Isenberg SM, 21 April 2015.)
[LTN 74, 21/5/15]
Catchwords from [2015] NSWCATAD 80
Land tax – principal place of residence exemption; absence from former residence; income derived from use or occupation of a former residence.
Principal Place of Residence – ‘absence’ concession: s8, Schedule 1A
8. Concession for absences from former residence
(1) A person is taken, for the purpose of the principal place of residence exemption, to continue to use and occupy land formerly used and occupied by the person as a principal place of residence (a “former residence” ), after the person ceases to so use and occupy the former residence, if the Chief Commissioner is satisfied that:
(a) the person used and occupied the former residence as a principal place of residence for a continuous period of at least 6 months, and
(b) the person does not own any other land used and occupied by the person as a principal place of residence.
(2) The maximum period for which a person may be taken, under this clause, to continue to use and occupy a former residence as a principal place of residence is 6 years starting at the end of the last period (of at least 6 months) during which the former residence was used and occupied by the person as a principal place of residence (not including any period for which the person may be taken, under clause 7 or this clause, to have used and occupied the former residence as a principal place of residence).
(3) If the principal place of residence exemption applies to the former residence of a person by operation of this clause, the exemption ceases to have effect if the person is the owner of the former residence at the end of the 6-year period referred to in subclause (2) and fails:
(a) to resume actual use and occupation of the residence as a principal place of residence by the end of that period, and
(b) to continue that use and occupation for at least 6 months.
…
(6) This clause applies in respect of the assessment of a person’s ownership of land in a tax year only if the Chief Commissioner is satisfied that no income has been derived from the use or occupation of the former residence in the preceding tax year, except as permitted by subclause (7).
(7) Income may be derived from the use or occupation of the former residence in a tax year if:
(a) the income is derived from a lease, licence or other arrangement under which a person has a right to occupy the former residence and the period for which any such right of occupation is conferred does not exceed a continuous period of 6 months, or a total period of 182 days, in the tax year, or
(b) the income is derived from any arrangement under which a person occupies the former residence, but the income is no more than is reasonably required to cover council, water and energy rates and charges and maintenance costs of the owner in respect of the residence.